Inspector Patton v Bluescope Steel

Inspector Patton v Bluescope Steel - [2006] NSWIRComm 283 - NSWIRComm 2006 case summary — Zoe

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4 Evidence was called by the defendant from Mr Michael Cassar, the defendant's Vice-President, Occupational Health and Safety. He was not required for cross examination. 5 The maximum penalty for each offence was agreed to be $825,000, but the parties agreed that the two offences both arose out of the same circumstances and that the principle of totality applied. The parties were otherwise agreed as to the applicable sentencing principles. There were only two issues about which they disagreed. The first, whether the evidence properly led to the conclusion that these offences fell into the serious category, as was argued for the prosecutor, or whether they fell into the moderate range, as was the defendant's case. The second, the role which deterrence should play in the penalty here imposed. 6 The case for the prosecutor, advanced by Ms Nomchong of counsel, was that it would be concluded that the offences fell within the serious range, because the risk involved was exposure to a potentially dangerous gas, which was colourless and odourless, with the potential to cause serious injury. That risk was known and recognised by the defendant. The system which it had in place to deal with that risk, did not properly address the possibility of dispersion of the gas onto the cast house floor of the blast furnace and into the external vicinity of the plant. 7 The parties had agreed that employees had developed a tolerance to the alarms which the defendant operated as part of its safety systems, so as to alert them to the presence of gas. This was a problem to which the defendant ought to have been alive. The result was that the system in place carried with it an inherent, identifiable and serious risk of injury, although it was accepted that the risk materialised because of the interaction of two unusual circumstances. The first, a mechanical failure not previously experienced, which led to a large, uncontained escape of gas. The second, unusually calm atmospheric conditions, with the result that the gas did not disperse into the atmosphere in the usual way without any safety risk arising, when released from the precipitator. Nevertheless, the evidence showed that the risk which materialised was obvious as to foreseeability and serious in its consequences. Appropriate measures to deal with the risk were available to the defendant, but were not taken, as the steps implemented after the incident revealed. 8 It was also acknowledged that this defendant had in place sophisticated safety measures and that it paid proper attention to its obligations under the Act. Nevertheless, given the nature of the failures here in question and the seriousness of the potential consequences of those failures, both general and specific deterrence had a role to play in the penalty to be imposed. As to the defendant's record, it was submitted that the defendant:

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'has been operating since 1928 in what must be one of the most dangerous industries in operation in New South Wales. The prior record must also take into account the large size of the defendant's workplace and the number of work sites it has had in New South Wales in that period. 9 Various subjective factors were accepted as being relevant to penalty, by way of mitigation. I will deal with those matters below. 10 For the defendant, it was submitted by Mr Buchanan of Queens Counsel, that while the defendant accepted entirely that a guilty plea was appropriately entered in the circumstances in which the risk in question here materialised, the suggestion that this offence fell into the serious range, was not to properly recognise the criminality of the offences in question. The defendant's criminality was not of a high order and ought to result in a moderate penalty at most. 11 The evidence showed that the defendant paid extremely serious attention to its obligations under the Act. It had adequate safety measures in place, which had only proved inadequate, because of the interaction of two unusual circumstances, which the defendant accepted it had not adequately provided for in the applicable safety procedures. This was not a case, however, of careless or inadequate approach by the defendant to its obligation to ensure safety. As to its record, the defendant accepted the prosecutor's submission as a fair one. That record did not suggest any disregard for the defendant's safety record. 12 Also to be considered was that exposure to carbon monoxide was an everyday feature of life which raised no safety issues. In this case, it was that excessive exposure had resulted from an unusual combination of circumstances, not any systemic failure in the applicable safety system. The seriousness of the potential consequences of exposure to high levels of carbon monoxide was not sought to be discounted, but it was submitted that what had occurred needed to be considered in its proper context, when penalty was being considered. 13 Having regard to the evidence as to this defendant's approach to its safety obligations, it was submitted that specific deterrence had but a small role to play in the sentence imposed and that it did not serve the policy objectives of the Act, to impose a punishment by way of general deterrence on defendants 'who try hard to stay at the top of the responsible efforts in this area.' It was argued that the sentencing process ought to encourage such observance, by appropriate account being taken of that evidence. Consideration 14 Consistently with the Crimes (Sentencing Procedure) Act 1999, a determination of the sentence here to be imposed must be approached from a consideration of the nature and seriousness of the offences in question, together with aggravating and mitigating factors. In this case, I am satisfied that the evidence demonstrated, to the requisite degree, that the offences charged were each proven. 15 The gas which was released on 11 April had various components, including carbon monoxide. The risk which materialised, namely exposure to high levels of carbon monoxide gas for an excessive amount of time, was a serious one, given the potential consequences of such exposure. That the defendant appreciated the existence of that risk and took a number of steps to ensure that it did not materialise, was plainly established. It follows that the risk in question was foreseen. 16 The evidence was that ordinarily, release of the gas from the precipitator tank occurred while the precipitator was being taken off line, during a process which took about 14 seconds. On this occasion, that process had to be undertaken because a gas leak had been detected in the precipitator. This itself was an unusual occurrence, but the decision was made to repair the leak, outside the normal maintenance schedule. Given the defendant's safety obligations, it seems to me that this was an understandable decision. 17 A risk assessment of the work was undertaken. The system under which the work was performed as a result, ensured that employees performing the work which gave rise to the gas release were not put at risk thereby, because of the safety equipment which they wore - full face self contained breathing apparatus. The defendant's experience was that prevailing atmospheric conditions were normally sufficient to disperse the usual 14 second gas release, so that others outside the precipitator not wearing such protective equipment, were not put at any risk by its release. Other employees in the vicinity were alerted by alarms to clear the area 10 minutes before and for 10 minutes after the release and two Serco employees were stationed at roadblocks nearby, to help ensure that the area was kept clear. 18 What the system failed to adequately provide for however, materialised on 11 April. Firstly, the mechanism involved in releasing the gas jammed, so that an uncontrolled release of gas resulted, for a period of 3 to 4 minutes, rather than the usual 14 seconds. Such a problem had never arisen before with that mechanism. The resulting release of gas and its consequences, were exacerbated by the unusually still atmospheric conditions prevailing that day. The conjunction of those two factors had the result that instead of a small amount of gas dispersing quickly, a large amount of gas remained at a level which permitted it to enter the blast furnace, where a number of people were working on the cast house floor, as well as escaping into the area surrounding the precipitator, where other people were manning a roadblock. 19 In the blast furnace, fixed gas monitors detected when carbon monoxide levels in the plant reached 30 parts per million ('ppm'). Those detectors did not however, measure how concentrated the carbon monoxide was. That proved to be a deficiency in the circumstances which unfolded. The defendant's system involved that once that level of gas was detected by the monitors, alarms sounded, warning that those working in the area should evacuate and if this was not possible, for contact to be made with the control room, which dispatched an inspector to take a reading of the gas level. The system then required that if the level exceeded 100 ppm, there was an evacuation of all workers, other than those equipped with the necessary safety equipment, who would then remain to safely secure the blast furnace. 20 On this occasion, the system failed to ensure the safety of those working in the blast furnace. While the alarms sounded, once carbon monoxide levels reached 30 ppm, there was neither an evacuation, or the donning of the necessary safety equipment, before three people working in the blast furnace were affected by carbon monoxide gas. As a result, Mr Graham experienced dizziness and nausea, became disoriented and collapsed, while trying to make his way to the control room. Mr Russoniello experienced dizziness and collapsed near his workstation. Mr Gianfrancesco fell over, after moving away from the cast house floor, breaking his right ring finger and suffering abrasions to various parts of his body. None of these people were equipped with a personal gas monitor or with breathing equipment. Their exposure to the gas was at sufficiently high levels and for a sufficiently long enough period of time, to permit them to be poisoned. 21 Two other people had been provided with personal gas monitors, before the gas was released. They were stationed outside the blast furnace, at the roadblocks established in the vicinity. Mr Segovic left that area, as the defendant had earlier instructed, once his personal gas monitor registered a level exceeding 200 ppm. While not mentioned in the agreed statement of facts, the prosecutor submitted and the defendant accepted as correct, that his monitor had recorded a reading of 2,000 ppm. He reported feeling sick in the stomach. Mr Edwards, manning the other roadblock, recorded no carbon monoxide levels on his monitor, but he also moved away and joined Mr Segovic. Mr Edwards was sent to provide assistance with those who had been affected by the gas inside the blast furnace. 22 What levels of carbon monoxide the various people inside the blast furnace were exposed to and for how long, was not established on the evidence. The reading of 2000 ppm outside the blast furnace in the open air, throws some light on that matter, as do various documents in evidence. 23 The defendant's 2001 material safety data sheet records that the blast furnace gas is hazardous; that it is toxic by inhalation and that 'symptoms of acute poisoning may include headache, dizziness, disorientation, abnormal reflexes, difficult concentration, fainting, oedema, coma, seizures and death'. Fortunately the most severe of these symptoms were not suffered by those exposed to the gas on 11 April. 24 The data sheet also contains guidelines which provide that the exposure limit for carbon monoxide is 30 ppm, and that in order 'to control short term excursions above this limit, based on the toxicokinetic properties of carbon monoxide', exposure should not exceed 400 ppm and otherwise at 200 ppm, exposure for 15 minutes, at 100 ppm, 30 minutes and at 60 ppm, 60 minutes. 25 This no doubt explains why the gas monitors inside the blast furnace are designed to detect and warn that carbon monoxide levels have reached 30 ppm in the blast furnace. It also explains why the defendant's system proved to be inadequate, in ensuring safety in the circumstances as they developed. The gas levels inside the blast furnace must have climbed considerably higher than the 400 ppm limit provided by the guidelines, given the way in which the three people initially inside the blast furnace were affected. Such ill effects were what the guidelines sought to prevent. 26 A graph charting the effect of carbon monoxide shows that at 10,000 ppm, death occurs in minutes; at 5,000 ppm collapse occurs in minutes and at 1,000 ppm, headache and nausea occurs in minutes. 27 The Australian Government's National Occupational Health and Safety Commission Exposure Standard for Carbon Monoxide, indicates that high levels of carbon monoxide 'are likely to lead to unconsciousness and convulsions. Collapse may occur very quickly, before the victim is aware of impending danger'. The Standard also warns that individuals' responses to carbon dioxide may vary and that response may be exacerbated, in those with cardiovascular conditions. 28 It is these effects of exposure to carbon monoxide which pinpoints the nature of the failure in the defendant's systems, because two of those working inside the blast furnace were affected to the point of collapse and the other sufficiently overcome to fall and injure himself. In those circumstances, the way in which the system provided for the actual carbon monoxide levels inside the plant to be established, was plainly inadequate in a situation where gas levels rose suddenly, when a prolonged uncontrolled gas leak occurred. 29 The applicable written procedure also proved to be deficient. It provided that:

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Operation of goggle valve can release large volumes of gas at ground level so wind direction should be noted prior to operation. 30 This instruction was plainly inadequate. While it was, no doubt, directed to the defendant's usual planned 14 second release of the gas, the procedure ought to have dealt with the possibility that a gas release would be for a more prolonged period. The gas release resulted from the failure of mechanical equipment in the precipitator. While that equipment had never failed before, the possibility of a mechanical failure and thus a more prolonged period of gas release, ought to have been provided for, as the defendant accepted by its plea. 31 Because the procedure in place relied on the presence of wind to assist in the safe dispersal of the gas when released, its presence was important, more so, if a gas release became prolonged. While the procedure referred to the need to note wind direction, it did not alert operators to the need to ensure that the operation was not conducted when conditions were too still to permit safe gas dispersion. On the evidence, it was the absence of wind which permitted the large volume of gas released to remain in the vicinity and to enter the blast furnace, where the system in place did not provide for its accurate measurement quickly enough, once its presence had been detected, to ensure the safety of those inside the blast furnace. 32 Inside the blast furnace, the system depended on monitors which alerted those working there, to the fact that carbon monoxide was present at a level of 30 ppm. How high the level climbed beyond 30 ppm on 11 April, how rapidly and the rate at which those levels then fell, after the uncontrolled gas leak was halted, was not detectable by those working there, given the nature of the monitors located inside the blast furnace and the fact that those working there were not issued with personal monitors. Once the alarm had sounded, measurement of the actual gas level depended on the control room being alerted and then despatching an inspector. Evacuation was to occur if the inspector found that levels had reached 100 ppm. Any personnel then remaining for safety reasons, were to don the necessary protective equipment. Given that there ought to have been no exposure at all to levels of carbon monoxide gas beyond 400 ppm and at 200 ppm, exposure ought not to have lasted for longer than 15 minutes, the gap in the defendant's system becomes obvious. There was no evidence that the levels were ever measured by an inspector that day. 33 In this case, the result was that three people working inside the blast furnace succumbed to carbon monoxide poisoning. Whether it was because those working in the blast furnace and/or the control room responded too slowly to the alarms which alerted them to the 30 ppm level having been reached and the need to take steps to measure the levels inside the blast furnace, or because the level of carbon monoxide inside the blast furnace climbed too quickly, to permit the levels to be read as the procedure envisaged and the area to be evacuated, or protective equipment to be donned, within the time available, was not clear. Perhaps it was because of a combination of both of these factors. The result was, however, that carbon monoxide levels increased beyond what the applicable safety procedures envisaged and the defendant's safety obligations permitted, without safety apparatus being used. The result was that those present suffered acute poisoning with symptoms described in the defendant's data sheet as headache, dizziness, disorientation, abnormal reflexes, difficult concentration and fainting. 34 Despite that situation having manifested, it appears that the defendant then also sent Mr Edwards into the blast furnace to assist those inside, who had already been made ill by the gas. The evidence was that Mr Edwards had earlier been equipped with a personal gas monitor when he was outside, manning the road block. There was no suggestion that he was not still wearing that monitor when he entered the blast furnace, but what levels were recorded inside the blast furnace was not in evidence. There was no evidence that the defendant took steps to ensure that Mr Edwards was safely able to enter and remain in the blast furnace, even though it was known that others had already been poisoned by the gas present inside. On the evidence, only those working on the isolation of the gas leak were provided with safety equipment. There was no evidence that an inspector ever measured the gas levels inside the blast furnace, as the system envisaged. It follows that the defendant's system also failed to ensure safety at this point, as the defendant's guilty plea also accepted. 35 That none of those exposed to the gas suffered lasting ill effects, was plainly a matter of good luck in the circumstances, not as the result of the defendant's system having ensured their safety. 36 In determining the nature and seriousness of these offences, consideration must also be given to the potential consequences of carbon monoxide poisoning. As Haylen J observed in Inspector Ian Lancaster v BHP Steel (AIS) Pty Ltd [2001] NSWIRComm 261 at [42]: s The true measure of penalty lies in the nature and quality of the offence: subjective factors which mitigate against the seriousness of the offence or exculpate the accused must be secondary consideration (Lawrenson at 474). s The gravity of the consequences of an accident does not of itself dictate the seriousness of the offence. However, the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the gravity of the breach and culpability of the defendant (Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Lawrenson at 476. s It will be considered a serious offence where there is an obvious risk or a foreseeable risk to safety and where appropriate measures were not taken although those measures were available, feasible and relatively simple to adopt (Lawrenson Diecasting v WorkCover Authority (NSW) (Inspector Ch'ng) (1999) 90 IR 464 at 476.

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37 Those affected were assisted out of the blast furnace where they were treated by ambulance and removed to hospital. The evidence was that certain of the effects of carbon monoxide are reversible. There was no evidence that any of those injured suffered lasting consequences. The injuries sustained by Mr Gianfrancesco, were no doubt longer lasting, given the injuries he sustained when he fell, although luckily, they were not more serious. As the prosecutor rightly submitted, more serious injuries could have resulted from employees becoming dizzy, disoriented and falling, in a dangerous working environment such as that prevailing in the cast room floor of the blast furnace. 38 That the situation was unprecedented, as I have accepted, must be taken into account. What must also be considered, however, is the inadequacy of the system designed to guard those working at the steelworks against the risk of carbon monoxide poisoning, which included a risk of death from exposure to the gas alone, if the exposure to a high concentration of the gas was sufficiently prolonged. That the system ought to have been capable of dealing with a prolonged gas release, given the nature of the defendant's undertaking at the steelworks, was plainly accepted by the defendant, given its guilty plea to the charges laid. 39 Also to be taken into account, are the way in which the deficiencies in the system were addressed. They were quickly recognised by the defendant and were attended to, by an extensive series of measures, designed to rectify the problems revealed in the system. Specifically, the system was altered to require all workers to leave the plant, if a gas alarm sounded, until an inspector checked the gas levels. Additional breathing apparatus was also placed throughout the blast furnace. It must be accepted, as the prosecutor submitted, that these steps were ones available to the defendant to take, before the incident occurred. 40 Otherwise, the matter was drawn to the attention of senior management and an internal investigation was conducted; the results were discussed by the Board's Health Safety and Environment Committee and the Executive Leadership team and were communicated across the defendant's operations, nationally and internationally. 41 New procedures for the goggle valve operation followed; the emergency procedure was reviewed; induction in the blast furnace operation was expanded to deal in greater detail with gas monitors and the necessary responses to them; employees were retrained in gas procedures and a new training pack was developed and made available to all employees and contractors; over 100 additional personal carbon dioxide monitors were purchased and made available to those working in the blast furnace, with new controls for monitoring the accuracy of the monitors themselves introduced; the alarm system was reviewed and all plant within the blast furnace department re-assessed for possible gas releases; the findings of the review were also considered by a committee, which developed various measures such as an emergency back up system to shut off gas supply in the event of goggle valve failure and further training of employees in gas safety levels; the No 5 blast furnace where the incident occurred was also reviewed and two goggle valves replaced with enclosed valves, at a cost of $3.5 million and a further $350,000 was spent on engineering improvements to other valves; further work is planned in 2007; the site was further modified to exclude staff from areas of potential gas hazard at a cost of $150,000; radio controls were installed at the dust removal area of the blast furnace, to introduce remote cleaning processes and to avoid staff being near possible gas discharges; two sets of self contained breathing apparatus were placed in operator's cabins and the Hazard and Risk Register was updated. 42 All of these matters are relevant to be taken into account in determining the nature and seriousness of the offence. Plainly, the risk presented by exposure to carbon monoxide was potentially deadly and well known to the defendant, which took various steps before this incident, to ensure that the risk did not materialise, as I have noted. They proved to be deficient and the defendant sought to remedy them, by the various steps taken after the incident. That such steps were available to be taken beforehand, was not disputed by the defendant. That some of them were simple and obvious steps and would have prevented what here occurred if taken beforehand, was also not seriously disputed. Personal gas monitors would have enabled those in the blast furnace to detect the actual carbon monoxide levels present where they were working; evacuation until an inspector measured gas levels present would also have removed employees from exposure to excessive levels of gas and the use of breathing equipment by those who remained while the levels were measured, would have permitted those who had to remain, to continue their work in safety. 43 Plainly the steps taken after the incident all assisted in attending to the removal of the risks which here manifested. In coming to conclusions about the appropriate sentence for these offences, I have taken all of these matters into account. 44 I accept the prosecutor's submission that the circumstances are such that general deterrence has a role to play in the penalty imposed. In this respect, I am bound to follow the approach discussed by the Full Court in Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 at [71] - [79], that deterrence should normally be a matter of significant weight in the sentencing process. I also accept, however, the defendant's submission that specific deterrence has a smaller role to play in this case, than in many others, given the impressive evidence of this defendant's attention to its safety obligations, both before and after the incident in question. Without that evidence, a higher penalty must have resulted. 45 As was noted for the prosecutor, the Inspector too, was impressed by the defendant's proactive approach to its safety obligations. The defendant employs a large staff specifically devoted to safety matters. The evidence included that the defendant's aim is to 'achieve a standard of 'ZERO HARM" to people in conducting its undertaking as a heavy industrial company.' Given the nature of this defendant's operations and the hazardous industry in which it operates, this is undoubtedly a proper aim, consistent with the obligations imposed by the Act. In order to achieve this aim, the defendant has taken numerous practical steps. It has an extensive health and safety system in operation, with various levels including policies, standards, information, systems of work to ensure particular work is undertaken safely; risk-based committees in technical and operational areas; safe operating procedures; safety committees; an authority to work maintenance system; safety plans; training to reinforce safe behaviours and individual involvement in safety processes, including job safety analysis, take two and toolbox meetings, induction and ongoing training in areas such as hazard identification, assessment and control; incident and hazard reporting systems, including near miss reporting; safety audits and contractor management. 46 In practical terms, Mr Cassar gave evidence as to the defendant's achievements in improving its safety performance in various measurable ways, including improvements in lost time injury frequency rates and medically treated injury frequency rates. There has been no lost time injury at the blast furnace in question since the incident and zero medically treated injury. 47 Given the inherently dangerous business in which this defendant operates, its stated aims are no doubt difficult to achieve. Indeed, its significant record of convictions under the Act, attests to the fact that it has not achieved its aim. However, as was conceded for the prosecutor, I accept that 'the prior record must also take into account the large size of the defendant's workplace and the number of work sites it has had in New South Wales during that period'. 48 I am well satisfied that this attention to its safety obligations, is a matter properly to be taken into account in fixing the penalty to be imposed, by reducing the role which the element of specific deterrence plays in this case. The evidence well established that any penalty which could be imposed under this statutory scheme, even as a maximum, has already been far outweighed by the cost of the steps taken by this defendant since this incident, to address the deficiencies in its systems, which the incident highlighted. I am satisfied that it is proper for the Court to encourage defendants adopting such an approach. 49 I am also satisfied however, that specific deterrence may not be entirely removed as an element of penalty, given this defendant's record, which dates back to 1958, with over 70 offences in total, nine offences since 2000, resulting in penalties imposed by this Court, one of $200,000, one of $140,000, one of $120,000 and one of $80,000. Lower penalties were imposed by Magistrates Courts in other prosecutions. Record is a matter which must be taken into account in determining penalty, as the prosecutor submitted (See Regina v Darrell Terry McNaughton [2006] NSWCCA 242). In the case of this defendant, that record is plainly a considerable one, even if it must be considered in the context of this defendant's considerable operation over very many years, in heavy industry in various parts of this State. 50 As to the various subjective matters relevant to the offence, I note the prosecutor's submission that the plea was entered at the earliest opportunity, following the amendment of the charge laid and that there was co-operation provided to the WorkCover Authority. I also accept that the evidence demonstrated that through its actions, the defendant has shown considerable remorse and contrition for what occurred. It is also relevant that it has provided various assistance to the injured workers, their families and to others involved in the blast furnace department. I have already dealt with this defendant's approach to its safety obligations and its response to the incident which occurred. I have taken all of these matters into account, by way of reduction of the penalty otherwise to be imposed.

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Penalties 51 Having weighed all of the matters I have mentioned, I concluded that the appropriate penalty was $210,000 for each offence, a total of $420,000. 52 In coming to that figure, I note that I adopted the approach discussed in Inspector Brett Martin v Encore Tissue Pty Limited [2005] NSWIRComm 271 at [29] to [31] and Inspector David Waterhouse v Innovative Property Developments Pty Ltd and Others [2006] NSWIRComm 97 at [64] to [67]. I here concluded that a discount of 25% for utilitarian savings achieved by the acknowledged entry of early pleas, at the earliest opportunity, after the charges were amended by the prosecutor, was an appropriate discount on the penalties which I had otherwise determined were appropriate in all the circumstances of each case. 53 The principle of totality must also be applied. (See Crown in Right of State of NSW (Dept of Education & Training) v Keenan [2001] NSWIRComm 106). A total penalty of $420,000 for the two offences must be considered against a penalty backdrop of $825,000 for each offence. On any proper and fair consideration of the defendant's criminality in these cases, that would impose a penalty in excess of its culpability, given the substantial albeit not complete, overlap between the two offences. Accordingly, in determining an appropriate penalty by applying the principle of totality, I have concluded that an overall penalty for the two offences of $240,000 is just in all of the circumstances. This results in a final penalty in each case of $120,000, as I take the view that both offences are of equal culpability. Orders 54 For the reasons given, I find the defendant guilty of the charges to which the pleas were entered and enter convictions accordingly. BlueScope Steel Pty Limited is ordered to pay a penalty of $120,000 in each matter, with a moiety to the prosecutor in each case. 55 The prosecutor sought an order for costs in terms which were not opposed, but which encompassed the possibility of an assessment process. That being so, I cannot see how it can be ordered, at this stage, that such costs are to be paid within 28 days. Accordingly, I make the more usual order, that the defendant pay the prosecutor's costs as agreed, or in the absence of agreement, as assessed by the Court. The parties have liberty to approach in that respect.

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